CONSULTING GROUP CAPITAL MARKETS FUNDS (the "Trust")
Supplement dated February 11, 1997 to the Prospectus dated December 31,
1996
Effective March 31, 1997 Pilgrim Baxter & Associates, Inc.
("PBA"), a wholly-owned subsidiary of United Asset Management
Corporation will cease operating as investment adviser for a portion of
the assets of Small Capitalization Growth Investments (the
"Portfolio"). The Consulting Group, a division of the Trust's
Investment Manager, Smith Barney Mutual Funds Management Inc., had been
involved in ongoing discussions with PBA regarding their future
relationship with the Trust. In anticipation that the relationship may
not continue, the Consulting Group had undertaken a search of possible
replacement investment adviser(s) who specialize in the small
capitalization discipline. In accordance with the investment advisory
agreement between the Trust and PBA, PBA notified the Trust that they
will cease acting as investment adviser on March 31, 1997. Once a
replacement adviser is selected and approved by the Board of Trustees,
the Trust will communicate information to shareholders of this Portfolio
regarding this new adviser.
Supplement dated March 25, 1997 to the Prospectus dated December 31,
1996
On March 4, 1997 the Fund's Board of Trustees approved the
following:
An amendment to the Trust's investment policies to permit Standish
Ayer & Wood, Inc. and National Asset Management Inc., investment
advisers (collectively, the "Advisors") to Intermediate Fixed Income
Investments and Long-Term Bond Investments, respectively (collectively
referred to as "Portfolios" and individually as "Portfolio") to invest
in Asset-Backed Securities ("ABSs"). ABSs are well established and have
become increasingly prevalent in the fixed income market. ABSs may
enhance a Portfolio's performance; however, their use involves certain
risks that may not be found in other mutual fund investments. Both
Advisors are only authorized to invest in those ABSs that have received
a AAA rating from both Moody's and Standard & Poor's and may only invest
up to 5% of the Portfolio's net assets in this type of security.
A new investment advisory agreement for a portion of the assets of
Small Capitalization Growth Investments ("Small Cap") between Berger
Associates, Inc. ("Berger Associates"), as replacement adviser to
Pilgrim Baxter & Associates, Inc. ("PBA") and Smith Barney Mutual Funds
Management Inc. The new advisory agreement will be identical in all
material respects to the agreement with PBA except that Berger
Associates will be receiving 0.50% for its services that is computed
daily and paid monthly based on the value of the average net assets of
the Portfolio subject to the shareholders approving an increase in the
management fee payable to SBMFM. Berger Associates was founded in 1973
and currently manages $3.7 billion in assets. Shareholders of this
Portfolio will soon be receive detailed information concerning Berger
Associates.
A change of the investment strategy of Boston Structured Advisers
("BSA"), investment adviser to a portion of the assets of Large
Capitalization Growth Investments from an "enhanced index" manager to a
pure index manager. This change in investment strategy will result in
BSA's fees being decreased.
Supplement dated June 27, 1997 to the Prospectus dated December
31, 1996
On June 5, 1997 the Board of Trustees approved the hiring of Wall
Street Associates ("WSA") as an additional sub-adviser to Small
Capitalization Growth Investments (the "Portfolio"). The Consulting
Group, a division of Smith Barney Mutual Funds Management Inc.,
("SBMFM") the Trust's Investment Manager, recommended the hiring of an
additional active manager to allow the Portfolio to take greater
advantage of the inefficiencies within the small-cap market without
incurring any capacity restraints. Prior to the hiring of WSA, the
Portfolio had been allocated 70% to an index strategy and 30% to an
active strategy. With the hiring of WSA, the structure of the Portfolio
will be returned to its original allocation of 50% active and 50% index
with Berger Associates, Inc. and WSA splitting the active portion of the
Portfolio.
The hiring of WSA resulted in the entering into a sub-advisory
agreement dated as of June 23, 1997 between SBMFM and WSA. Under the
terms of the agreement, WSA will be receiving 0.50% for its services, a
fee that is computed daily and paid monthly based on the value of the
average net assets of the Portfolio. WSA, located in La Jolla,
California, was founded in 1987 and currently manages $1.1 billion in
assets. Shareholders of this Portfolio will soon receive detailed
information concerning this firm.
FD 1311 6/97
